Home-Sales Frenzy Eases

9/16/2013 10:46AM

After a yearlong rally, the U.S. housing market is showing signs of cooling as higher prices and interest rates, a slowdown in investor purchases and shortages of homes for sale weigh on one of the economy's brightest sectors. Nick Timiraos reports on MoneyBeat. Photo: Getty Images.

This transcript has been automatically generated and may not be 100% accurate.

... I ... what are the big things in this full recovery ... is slow and that is showing signs that he's ... losing some steam ... the cameras is here the story ... story on the three feet that today ... are how strong is the housing market was ago ... I think what we're seeing is the housing market still strong but ... it was ... on fire earlier this year and is pulling down from that ... from that frenzy I mean in the spring we were talking a bit of a bidding war is the ... three dozen offers on houses in the first few days on the market ... and home prices going up very quickly because there were more buyers chasing fewer homes for sale ... and people were saying will ... you know this is this is a lot ... very quickly ... interest rates one up of course in May and June ... I'm more up almost of more than a full point now where war early May ... and so that's taken some of the steam out of the market I don't think anybody saying that ... things are going to collapse are there some kind of terrible slide here ... it looks a wee ... wee maybe it ... hit a short-term soft patch as buyers and sellers just ... bowed to higher rates but also lumber prices have been going on to and when ... interest rates were falling in November December January February ... every time interest rates fell ... sell us what they were able to kind of boost appraisal of the more ... it didn't matter much to the buyer because the borrowing costs so cheap what what's another ten thousand dollars ... the financing costs would would allow them to to get away with that ... now I think you're hearing more and less commentary that ... rising rates have been kind of a red light ... on some of this breakneck price appreciation counter for another thing that makes right now I know we talk alot about him the cash buyers are out there ... how different is this housing market from ... that obviously the ball leaders for their own world ... but how different is this from even the people you it's not a normal recovery in the sense that you have had ... such a Lord share of all cash buyers ... you've had a lot of investors in these markets ... and again ... you know interest rates won't affect people paying cash but higher prices well ... and so was a lot of these organs have gone away in Phoenix among states in Sacramento where there were hearing about investors pulling back ... the because they think ... of thousands of that vibe but it's no longer in their price range coal prices to move out of that sweet spot ... the bargains are gone ... foreclosures are drying up ... and the sofa or sing inventories that ... really replenishing here endorsing the mentor is come up a little bit ... but they're being filled increasingly by the non distressed segment of the market of course in a lot of foreclosures now ... as inventories of ... which was off three years ago when home prices went down after the tax credit spike that would be a cause for concern when not seen a lot of buildup in foreclosures right now and so ... it's a sign that we're going to maybe a more normal market Mormon stabilize market but it'll be important to see how that handoff ... from the investor buyer ... the owner occupant mortgage dependent on or unfolds how much of this I know there was a real estate it's all local right now how much of this is is local but all ... that on my street ... winters E ... on two houses sold very quickly ... right oh three and unusually fast ... how much this is wishing him well it's it's very much a local story and what we're hearing from real estate agents across the country is that ... if a seller prices for home write ... it sells right away ... the virus right now are being a little bit trickier they're staying here because they're looking at the house that there are ... there wanna bias the place to unload for the next seven or eight years and so they're willing to hold out for the right house at the right price ... and with a little that higher interest rate I mean nobody's suggesting ... that a foreigner half percent interest rate is high for this is historically a great interest rate ... but ... there are the monthly payment is higher than it was a few months ago so ... they're gonna still going to really make sure ... it's the right thing they don't want to overpay ... they wanted to be the right house and are not going to ... just go for the second ten percent above what the last one one four ... on because the seller thinks they should be able to get that that I knew that stuff think you're an ...